Hensarling "unconvinced" on Treasury plan

By PATRICK O'CONNOR

09/19/2008 05:36 PM EDT

An outspoken House conservative remains highly wary of an as-yet-unveiled legislative proposal granting the administration authority to buy up devalued assets in an effort to unclog the U.S. financial system.

Texas Rep. Jeb Hensarling, who Thursday declared "enough in enough" after another federal bailout of a failing financial titan, acknowledges that the economy is in a "crisis" after hearing Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke walk lawmakers through the risks that exist on the immediate horizon.

But Hensarling, who says his mind "remains open, released a statement Friday to say, "At the moment I remain skeptical, fearful, and unconvinced that (the proposal being discussed) is the proper remedy for our nation at this time.”

“At this point, Congress is being asked to support an uncertain entity, costing an uncertain amount of dollars, for an uncertain duration – a decision that will have implications for generations to come and requires absolute certainty," Hensarling said. "We are being asked to go ‘all in’ with taxpayer dollars, and once our government and the taxpayer is on the hook, there is no fallback option."

He points out that the proposal being discussed "recognizes that the ad hoc, episodic bailout strategy was clearly not working."

But he said, "My fear is that taxpayers will be left with the mother of all debts, the federal government becomes the lender and guarantor of last resort, and our nation finds itself on the slippery slope to socialism.

“We are told that this is a choice between the lesser of two evils," the congressman continues. "If that is the case, I believe that we have an obligation to safeguard taxpayers above all else. Needless to say."

UPDATE: Members of the conservative Republican Study Committee, which Hensarling chairs, will hold a conference call Saturday to discuss the Treasury proposal. But there isn't unanimty amongst the conservative faithful. California Rep. John Campbell, an often-outspoken conservative, backs the plan and is making that case to as many colleagues as possible. "We need to take dramatic, complete and immediate action," Campbell said Friday.